The Cloud is REAL. The Cloud is HOT. The Cloud is NOW!! The Cloud solves all of your problems and...it even makes breakfast for you every morning! A bit of embellishment there at the last, but you must agree that the industry noise is as loud as the15" Kicker Solo-Baric Subwoofers you wanted back in high school.
The industry buzz is so extreme around this technology, I hereby predict that "the Cloud" will be win the top spot in 2009 on the list for buzzwords customers most despise. Pretty safe bet given that executives surveyed by Network Computing marked "Web 2.0" and "SOA" as the most loathed in 2008 and 2007 respectively. Whether customers love or hate the terminology, there is no denying that demand for this technology will grow to epic proportions. With that, I wanted to start a conversation about what Sales needs to know and how we can benefit. Consider this part one of a series...
So what is the Cloud anyway? After reviewing too many sites to name, I found the coolest definition of Could computing on a fairly new Berkeley University blog, Above the Clouds: "Cloud Computing refers to both the applications delivered as services over the Internet and the hardware and systems software in the datacenters that provide those services. The services themselves have long been referred to as Software as a Service (SaaS). The datacenter hardware and software is what we will call a Cloud."
Many of us in tech sales have been selling Cloud stuff for years - at the simplest level, the Cloud is really "the Internet" - a bunch of hardware and software running in data centers around the world.
Talking with executives across industries, I have found that the main differences between then and now center around power, packaging and value.
With the Cloud, business leaders have gained enormous power to deploy business systems faster and cheaper than ever. Another power element is vitually unlimited bandwidth and processing
power (think of the effort of bringing up a 1,000 servers for a few days to support a Superbowl ad campaign vs. renting the space on Amazon EC2). The Cloud ostensibly frees the business from onerous investments in infrastructure and waiting in line behind IT other IT imperatives (like getting Sharepoint to work!). The value components include the financial benefit of realizing the acquisition as an operational expense vs. a capital expense (and all the committees that go with capital appropriations requests (CAR)) and the shortened return on investment (ROI) cycle. Nevermind that the average SaaS subscription exceeds the total cost of ownership of traditional software within 3 1/2 years...the name of the game is speed (It's not the big that eat the small, it's the fast that eat the slow- great read BTW)...and SaaS delivers speed (or as a Marketing wizard might say....business agility!).
SaaS salespeople have gained extraordinary leverage through the Cloud delivery model because they can sell more effectively top down. With a greatly reduced need for IT interaction, it has become practice to accelerate sales cycles to a fraction of the norm with support from the executive suite...so much so that IT has limited to zero visibility to what is coming. As eWeek cites in a recent article, "Fear and Loathing of Cloud Computing"IT is finding new ways to resist the Cloud beyond security and control issues. In the end, such resistance will serve as an opportunity for leadership as IT executives and their counterparts strive to "strike the right balance between cloud computing services and on-premise applications to (maximize) benefit of the business they serve."
The "2009 Cloud Computing survey", conducted by Kelton Research, interviewed 502 C-level executives and IT decision makers across 17 countries provides more insight on the opportunities and challenges for selling the cloud. Here is a brief summary:
Opportunities
-71% of global executives overwhelmingly agree that cloud computing is a real technology option
-4 out of 5 respondents report that existing internal IT systems are too expensive
-Top benefits for Cloud computing as "recognized" by respondents:
+ Improve ability to be flexible (70%)
+ Focus on the core business (65%)
+ React more quickly to market conditions (62%)
+ Gain access to the latest technologies (51%)
See any problem with these top benefits? The survey indicates that these benefits were "recognized", but not necessarily "realized" - why? I'll wager the inability to realize these benefits are directly correlated to the extent to which the benefits can be measured in tangible terms. These buckets seem to general to measure don't they? Where is the reduction to OpEx, for example??
Challenges
-By a 5-to-1 ratio, executives report that they trust existing internal systems over cloud-based systems due to fear of security threats and loss of data and system access
-The majority of companies (61 percent worldwide) are not using cloud computing systems at this time.
-More than 80 percent of those who use only internally owned IT systems do not plan on integrating any form of cloud computing in the next 12 months.
If this data (while somewhat counterintuitive) could talk it would say, "If you want to make your quota, you'd best focus on companies that have adopted SaaS!"
In summary, Cloud computing will be a force for market and revenue growth for years to come. SaaS, Business (or Managed) Service Providers (BSP/MSP), and other companies that leverage Cloud computing at the core will maintain a distinct competitive advantage. So if you're not there, I recommend you take a strong look. If you are there, congratulations...and tell the rest of us how it goes!
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